Tenant Improvement Contractor in San Jose
- 6 days ago
- 11 min read
Design-build office, medical, R&D, retail and restaurant build-outs across San Jose and the South Bay. Licensed general building contractor, CSLB #1079457.
Your lease is signed. Rent starts on a date that does not move. Between now and then sit a set of drawings, a plan check queue at the City of San José, a landlord work letter with conditions in it, and a build-out that has to be finished, inspected and signed off before your team can occupy the space.
DARCO runs that entire sequence as one accountable team. We are a design-build contractor, which means the architectural design, the construction documents and the field work all sit under one roof — so the drawings that go into plan check are drawn by people who know what it costs to build them and who will be the ones building it.
Call (408) 684-5297 or request a written estimate.
Free site walk and feasibility review. We reply within one business day.
What a tenant improvement actually is
A tenant improvement — TI, or a commercial build-out — is construction work that adapts an existing commercial space to a specific tenant's use. It is not ground-up construction and it is not a shell. You are working inside an existing building envelope, inside an existing lease, and usually inside a deadline set by a rent commencement date.
A typical TI scope includes some or all of the following:
Demolition of existing partitions and finishes
New interior partitions, doors, hardware and glazing
Ceiling systems and lighting
HVAC distribution, and often new or modified rooftop units
Electrical distribution, panels, power and data rough-in
Plumbing for restrooms, break rooms, and specialty fixtures
Fire sprinkler head relocation and fire alarm modifications
Flooring, paint, millwork and built-ins
Accessibility upgrades triggered by the work
Signage, and coordination of tenant-supplied furniture and equipment
Who pays for what
Most commercial leases include a tenant improvement allowance — a dollar amount per square foot the landlord contributes toward the build-out. In the South Bay these commonly run in the range of roughly $40 to $110 per square foot depending on building class and space type, with Class A office allowances at the higher end, though the actual number is negotiated deal by deal (Bay Area Realty & Construction; Custom Home Design and Build).
What that allowance covers is where tenants get surprised. Allowances typically fund permanent improvements that stay with the building — walls, doors, ceilings, flooring, HVAC, plumbing, electrical distribution, built-in casework. They typically exclude furniture, IT and AV equipment, sometimes low-voltage cabling, signage, specialty equipment and moving costs (Arch General Construction).
We read the work letter before you sign it. Knowing what the allowance does and does not cover — and getting a real construction number attached to the scope — changes what you should be negotiating for. That review costs you nothing and it is the single highest-leverage hour in the whole project.
What we build
Office build-outs
From second-generation refresh work — paint, carpet, lighting, minor reconfiguration — through full floor reconfigurations with new demising walls, conference and huddle rooms, upgraded HVAC zoning, and open-plan conversions. Darwin Fajardo, DARCO's founder, spent years managing pre-construction for office, retail and hospitality projects across the San Francisco Bay Area before starting the company, and office TI remains core work for us.
Medical and dental office
Exam rooms, operatories, sterilization and lab areas, imaging rooms with lead shielding, dedicated medical gas and vacuum lines, ADA-compliant restrooms and reception, and the specialized mechanical and plumbing infrastructure clinical space requires. Medical TI carries the longest permit path of any vertical and the tightest inspection scrutiny — it needs to be planned that way from week one.
R&D, lab and flex space
Silicon Valley R&D vacancy sat at 13.3% in Q2 2026 with average rent around $3.01 per square foot, tighter than general office and tightening further (Cushman & Wakefield R&D MarketBeat, Q2 2026). That means tenants who secure space are under pressure to build out fast. We handle lab casework, fume hood and exhaust coordination, upgraded power and cooling, gas and DI water distribution, and the office-to-lab conversions that dominate the North San Jose corridor.
Retail
Storefront and entry work, fixture and display coordination, point-of-sale infrastructure, dressing rooms, back-of-house and stockroom build-out, and the accessible path of travel that retail work almost always triggers. Retail is the healthiest commercial segment in this market right now — San Jose, Campbell and Los Gatos retail vacancy sat at 4.7% in Q1 2026 with net absorption nearly doubling quarter over quarter and no new retail construction underway (Cushman & Wakefield Silicon Valley Retail MarketBeat, Q1 2026). Tight supply means fit-out of existing space, not new shells.
Restaurants, bars and food service
Type I hoods and make-up air, grease interceptors, walk-in coolers, bar build-outs, dining room finishes, restroom accessibility and Santa Clara County Environmental Health plan review on top of building department review. Restaurant TI is the most complex and most expensive category per square foot, and the most punishing if it is scoped loosely. See our dedicated pages on [restaurant construction](/restaurant-construction) and [bar and pub construction](/bars-and-pubs-construction).
Industrial, warehouse and automotive
Warehouse office build-outs, mezzanines, dock and door modifications, and automotive service and dealership facilities — a specialty we have developed real depth in.
What tenant improvement costs in San Jose
There is no honest way to quote a build-out from a square footage number alone. What actually drives cost is the condition of the existing space, how much of the mechanical, electrical and plumbing systems you are touching, the finish level, and whether the work triggers accessibility or energy code upgrades.
That said, tenants need a starting range to negotiate a lease. These are directional Bay Area ranges compiled from contractor-published 2026 market data, not quotes:
Light cosmetic / turnkey office — $35 – $80
Second-generation office refresh — $80 – $150
Full office reconfiguration — $150 – $250
Class A / high-finish office — $200 – $350+
Retail build-out — $100 – $250
High-finish retail — $250 – $450
R&D / light manufacturing — $150 – $300
Medical and dental office — $200 – $500+
Restaurant — fast casual — $250 – $400
Restaurant — full service — $350 – $600+
Lab (high-intensity) — $400 – $900+
Ranges compiled from Arch General Construction, Bay Area Realty & Construction, Custom Home Design and Build and Golden State ADU. These are contractor-published directional estimates, not verified market benchmarks. Actual costs vary substantially by scope, existing conditions and finish level.
Why Bay Area numbers run high
Bay Area construction costs are estimated to run 30 to 50% above national averages, driven by labor rates, code stringency and permit timelines (Custom Home Design and Build). Mechanical, electrical and plumbing work alone can account for 35 to 45% of total Bay Area TI spend, and 2025–2026 tariff effects have added roughly 6% to material costs against a 2024 baseline (Arch General Construction).
The fastest way to get a real number is a site walk. We will walk the space with you, identify what the existing conditions actually allow, and give you a written estimate you can take into a lease negotiation.
Permits: how tenant improvement approval works in San Jose
Commercial tenant improvement permitting in San José runs through the Development Services Permit Center. A building permit is required, and plans are reviewed for zoning, building and fire code compliance before the permit issues (City of San José).
What gets submitted
The city's commercial TI package includes the Building Permit Application, the Commercial & Industrial Projects Submittal Checklist, the Tenant Improvements Plan Checklist, the Plan Review Submittal Package, a Construction Valuation Form, and a refundable Construction and Demolition Diversion Deposit. Depending on the site, a Geologic Hazard Clearance or Historic Preservation Permit may also be required (City of San José).
Two review paths
San José offers a Streamlined Tenant Alteration Review (STAR) Service for qualifying projects, which carries a premium fee in exchange for a faster review, and a Standard Plan Review Service for everything else (City of San José). Whether your project qualifies for STAR depends on scope, and it is worth determining early — on a deadline-driven build-out the premium fee is usually cheaper than the delay.
How long it really takes
The City of San José does not publish a numeric plan check turnaround. Contractor-published estimates put initial commercial TI review at roughly 4 to 8 weeks, with a total permit timeline of 2 to 5 months (Custom Home Design and Build), and note that San Jose plan check has run longer than historical norms through 2025 on application volume (Arch General Construction).
Two things matter more than the headline number. First, most commercial TI projects go through two to four correction cycles in plan check, and each cycle adds weeks — the quality of the initial submittal is the single biggest lever on permit duration. Second, a change of use — office to medical, retail to restaurant — can add many months of approvals before the project even reaches the building department. If your lease involves a change of use, that needs to be on the table before you sign.
Inspections are scheduled through SJPermits.org or by calling the Permit Center at 408-535-3555 (City of San José).
Code triggers most tenants do not budget for
ADA and accessible path of travel
When you alter a primary function area of an existing facility, California and federal law require an accessible path of travel to that area — but only to the extent the cost is not disproportionate, defined as exceeding 20% of the cost of the alteration to the primary function area (U.S. Access Board).
California Building Code Chapter 11B codifies the same 20% concept and adds a valuation threshold: below the state's annually adjusted threshold the 20% cap applies automatically; above it, full compliance is required unless the enforcing agency grants an unreasonable hardship finding — and even then, no less than 20% must still go to access improvements (UpCodes, CBC Chapter 11B).
Two details worth knowing. The 20% is calculated against hard construction cost only — architectural and engineering fees, project management, testing and utility connection fees are excluded. And there is a three-year lookback: alterations to the same path of travel within a three-year window are added together, so a project cannot be split into pieces to stay under the cap (UpCodes, CBC Chapter 11B).
When the cap is reached before full compliance, the code sets a priority order: accessible entrance first, then the route to the altered area, then restrooms, then telephones, then drinking fountains, then other elements (U.S. Access Board).
Title 24 energy compliance
California's energy code governs alterations to existing nonresidential buildings under Title 24 Part 6, Section 141.0, and the definition of an alteration is broad — any change to water heating, space conditioning, lighting, electrical power distribution or the envelope (California Energy Commission).
The trigger that catches tenants most often is lighting: altering 10% or more of the luminaires serving an enclosed space pulls that space into the lighting power and lighting control requirements (California Energy Commission). A build-out that looks cosmetic on paper can carry real compliance scope once you count fixtures.
We identify these triggers during pre-construction, before they become change orders. More on local requirements in our [permitting and regulations resource](/resources/permitting-and-regulations).
Timeline: lease signing to occupancy
Site walk, feasibility and existing conditions — 1 – 2 weeks
Design and construction documents — 2 – 6 weeks
Permit submittal and plan check — 4 – 12+ weeks
Construction — 6 – 16+ weeks
Inspections, sign-off and occupancy — 1 – 2 weeks
A standard 3,000 to 5,000 square foot office build-out typically runs 8 to 12 weeks of construction; a full restaurant with a commercial kitchen runs 12 to 16+ weeks (Custom Home Design and Build). Total lease-signing-to-move-in for most Bay Area TI projects lands somewhere between 4 and 9 months (Arch General Construction).
Design and permitting overlap where the scope allows it. Long-lead equipment — rooftop units, switchgear, custom millwork, kitchen equipment — gets ordered during plan check, not after permit issuance. That sequencing is usually worth more weeks than anything that happens on site.
Areas we serve
DARCO is based in San Jose and works throughout the South Bay and Peninsula:
Downtown San Jose — Class A and Class B office towers, where vacancy is high and landlords are competing on allowance packages. Downtown San Jose Class A vacancy was around 32.6% in Q1 2026 (Cresa Silicon Valley Office Occupier's Guide, Q1 2026). If you are negotiating downtown right now, you have leverage — use it on the work letter.
North San Jose R&D corridor — flex, lab and office-to-R&D conversions along the Golden Triangle.
Stevens Creek and Santana Row — retail, restaurant and showroom fit-outs.
West San Jose, Campbell, Los Gatos and Saratoga — professional office, medical and dental, and neighborhood retail.
Willow Glen and Cambrian — small-format retail, restaurant and professional office.
Santa Clara, Sunnyvale, Cupertino, Milpitas, Mountain View and Palo Alto — office, R&D and specialty commercial.
Why tenants and brokers work with DARCO
Design and construction under one roof. Larissa Fajardo, DARCO's Chief Design Officer, is a civil engineer with 17 years of construction experience and 11 years in interior design. Darwin Fajardo, President and CEO, brings over 15 years of construction experience including pre-construction management for hospitality, office and retail projects across the Bay Area. You are not coordinating between a designer who does not price work and a contractor who did not draw it.
Licensed, bonded and insured. California Contractors State License Board #1079457, Class B General Building Contractor, active. Verify it yourself at the CSLB license lookup.
We price the space in front of us. Existing conditions in a 1980s Stevens Creek retail building and a 2015 North San Jose flex building are not the same problem. Our estimates come from a site walk, not a spreadsheet.
We work in occupied buildings. Phased work, after-hours scheduling, dust and noise control, and coordination with building management so your neighbors — and your own operations — keep running.
Real answers on schedule. If the date you need is not achievable, we will tell you that during pre-construction, when you can still do something about it.
Frequently asked questions
What is the difference between a tenant improvement and a build-out? In practice, none — the terms are used interchangeably for construction that adapts existing commercial space to a tenant's use. "Tenant improvement" is the term you will see in leases and permit applications. "Build-out" and "fit-out" are the terms brokers and tenants tend to use.
Who pays for a tenant improvement, the landlord or the tenant? Usually both. The landlord contributes a tenant improvement allowance defined in the lease work letter, and the tenant funds anything above it. Allowances typically cover permanent improvements and exclude furniture, IT equipment and moving costs, which is where budget gaps appear.
Do I need a permit for a tenant improvement in San Jose? Yes. Commercial TI requires a building permit from the City of San José Development Services Permit Center, with plan review for zoning, building and fire code compliance (City of San José). Even work that looks cosmetic often touches lighting, mechanical or accessibility scope that requires review.
How long does a tenant improvement take in San Jose? Plan on 4 to 9 months from lease signing to occupancy for a typical project, with permit review being the least predictable phase. Simple second-generation office refreshes move faster; medical, lab and restaurant projects run longer.
Will my project trigger ADA upgrades? If you are altering a primary function area, you are required to provide an accessible path of travel to it, capped at 20% of the primary-function alteration cost in most cases (U.S. Access Board). Whether that means a restroom upgrade, a door hardware change or a parking and entry modification depends on the building's existing condition. We assess this during pre-construction.
Can you work while my business stays open? Yes. Phased scopes, after-hours and weekend work, temporary partitions and negative-pressure dust control are standard on occupied-building projects.
Do you help before the lease is signed? That is when we are most useful. A pre-lease site walk and feasibility review tells you what the space will actually cost to build out and whether the allowance being offered is adequate. It is free and it frequently changes the deal.
What is your license number? CSLB #1079457, Class B General Building Contractor.
Start with a site walk
Bring us the space and the work letter. We will walk it, flag the existing conditions and code triggers that will drive cost, and give you a written estimate and a realistic schedule.
Call (408) 684-5297 or request a written estimate.
DARCO Design + Construction · 999 W Taylor St, Suite A, San Jose, CA 95126 · CSLB #1079457
